1301:8-7-16 Prohibited practices.

(A) As used in division (C) of section 1322.07 of the Revised Code, conduct that constitutes improper, fraudulent, or dishonest dealings includes, but is not limited to:

(1) Failing to return, upon receipt of a written request for their return from a buyer, all original documents provided to the registrant or loan officer by the buyer;

(2) Permitting a person to originate loans, or holding the person out as being able to originate loans, on the registrant's behalf unless the person is registered or licensed under sections 1322.01 to 1322.12 of the Revised Code;

(3) Sharing, splitting, or receiving any commission, discount, fee or other remuneration with, or compensating any person required to be licensed or registered under chapter 1322. of the Revised Code who is not so licensed or registered;

(4) Knowingly aiding, abetting, or conspiring with a person to circumvent the requirements of chapter 1322. of the Revised Code or chapter 1301:8-7 of the Administrative Code;

(5) Recommending or encouraging default or delinquency or continuation of an existing default or delinquency by a buyer on any existing indebtedness prior to closing a mortgage loan which refinances all or a portion of such existing indebtedness;

(6) Materially underestimating closing costs;

(7) Failing within a reasonable time to honor a check issued to the superintendent of the division of financial institutions after the superintendent has mailed a request for payment by certified mail to the person's last known business address as reflected by the superintendent's records;

(8) Engaging in any other practice which the superintendent of the division of financial institutions, by published interpretation, has determined to be improper, fraudulent or dishonest;

(9) Depositing any loan disbursement check that is not made payable to the registrant or licensee.

(B) For purposes of divisions (A)(3), (A)(4) and (A)(5) of this rule, it is expected that all registrants and licensees use reasonable diligence to determine whether persons are registered or licensed. Obtaining a copy of a person's license or certificate shall not be sufficient evidence of a current license or certificate of registrations since suspension, revocation and cancellation proceedings occur throughout the year. The division has provided various means to determine whether a person is registered or licensed:

(1) A list of current registrants and licensees is provided at the division's internet website.

(2) The division responds to telephone inquiries from eight a.m. to four-thirty p.m. each weekday, except holidays, and provides current information to callers. The division also responds to written inquiries.

(C) It is a prohibited practice to:

(1) Make false or misleading statements of a material fact, omissions of statements required by state law, or false promises regarding a material fact, through advertising or other means, or engage in a continued course of misrepresentations;

(2) Knowlingly make, propose, or solicit fraudulent, false, or misleading statements on any mortgage document or on any document related to a mortgage, including, but not limited to, a mortgage application, real estate appraisal, or real estate settlement or closing document. For purposes of this division, "fraudulent, false, or misleading statements" does not include mathematical errors, inadvertent transposition of numbers, typographical errors, or any other bona fide error; or

(3) Knowlingly instruct, solicit, propose, or otherwise cause a buyer to sign in blank a mortgage related document, including, but not limited to, a mortgage application, real estate appraisal, or real estate settlement or closing document.

Effective: 09/01/2006
R.C. 119.032 review dates: 11/15/2009
Promulgated Under: 119.03
Statutory Authority: 1322.12
Rule Amplifies: 1322.07